Sunday, October 20, 2013

It has come to my attention that Freedom's Forge: How American Business Produced Victory in World War II, written by Charlottesville-based historian Arthur Herman, will be published in paperback on July 2. The book was first released in hardcover in May 2012 and, soon afterward, I had an opportunity to interview Herman about it.

The most important takeaway of Herman's research is that, contrary to mythology, America's successful industrial effort during the Second World War was not the result of central planning or intensive government action. Rather, it succeeded precisely because it was decentralized and (relatively speaking) undirected.

By contrast, Nazi Germany and Imperial Japan had highly centralized, highly bureaucratized war industries that collapsed under their own weight (much as the Soviet Union did, 45 years later, at the end of the Cold War).

I interviewed Arthur Herman, by coincidence, on the anniversary of the D-Day invasion of Normandy. He summarized some of his findings:

Industrial goods needed by the military – airplanes, ships, weapons, and Jeeps – came about because, even before Pearl Harbor “the military learned it was best to let business and manufacturers handle it themselves,” and that production should be decentralized, Herman said.

“They learned that minimal control from Washington -- or even from the military services -- usually ended up getting products on time,” he explained, and “at a continually lower cost as well.”

That, he said, “was really the key ingredient in the whole wartime production effort,” the fact “that the manufacturers and producers found ways to constantly roll the costs down."

This became, he said, "a huge boon not just for the American military, really giving us the tools to win World War II," but also a "huge boon to American business and industry because they became leaner, more efficient operating organizations as a result of the wartime effort.”

“What Ayn Rand understood,” he said, “and one of the lessons that you get from her work, which is in some ways is reflected in this book, is that what the arsenal of democracy was really all about wasn’t ships and tanks and planes, any more than national wealth or an economy is about oil wells and gold mines and factories and industrial output or goods and services.”

Rather, he explained, “what it’s really about is creativity. It’s about the creativity of the human mind. It’s about vision. It’s about leadership and problem-solving.”

Throughout its history, he noted, American business has “been really at the forefront of all of those aspects. That’s what drives American business. That’s what drives American civilization.”

Herman told me that one of the surprising things he learned while doing research for Freedom's Forge was how many people on the home front sacrificed their lives to the war effort.

“The most interesting statistic, stunning statistic that came out of my research was that in 1942, as this war production effort is going on, the number of Americans killed or injured in war-related industries surpassed the number of Americans in uniform killed and wounded in action in the war by a factor of 20 to 1,” he said.

The civilian sector of “what we call the Greatest Generation were [not] just sitting at home or just comfortably handling jobs while people in uniform were out risking their lives at sea and on land and in the air,” he said.

To the contrary, he explained, war production was “incredibly dangerous work. It involved enormous sacrifice from lots of people, including business executives. One hundred eighty-nine General Motors senior executives died on the job during the war.”

Another thing that people might find surprising is that the industrial war effort began long before the Japanese attack on Pearl Harbor in December 1941.

In fact, “the war production effort was well underway well before Pearl Harbor,” Herman pointed out.

“As I explain in the book, it really began in the summer of 1940 when Roosevelt realized war is going to come” and that he had to get the country ready for it,” so FDR called “Bill Knudsen, president of General Motors, and says, how do I do it?”

With the system that Knudsen put in place, with Roosevelt’s blessing, Herman continued, “far from being caught off guard, we had gone from a standing start to a wartime production that was fast approaching that of Hitler’s Germany. A lot of people don’t realize that but this is in fact what American industry could do.”

That 18-month jump on the "official" start of the war gave both military and civilian leaders a good learning curve

“starting in the summer of 1940,” Herman said, and “what the military learned was it was best to let business and manufacturers handle it themselves.”

The War Department, he explained, and President Roosevelt himself “learned that minimal control from Washington or even from the military services usually ended up getting products on time -- getting the tanks and planes and ships built -- at a continually lower cost as well”

The “key ingredient” of wartime production, Herman said, “is that the manufacturers and producers found ways to constantly roll the costs down, so it was a huge boon not just for the American military, giving us the tools to win World War II, but it was also a huge boon to American business and industry because they became leaner, more efficient operating organizations as a result of the wartime effort.”

While it may be common knowledge that some of the biggest pieces of war equipment were manufactured at the Newport News shipyards and similar facilities on both coasts of the United States, some vital items were made in central Virginia -- even in Charlottesville factories.

One was Ix Mills, located where the Frank Ix building still stands south of downtown.

During the war, he said, Ix Mills “moved from making commercial textiles to making parachute cloth. They really became the center of the parachute cloth making for the Second World War.”

The soldiers “who jumped on D-Day” as portrayed in Stephen Spielberg’s film, Saving Private Ryan, as well as the “airmen who had to jump out over Germany and at sea during the Second World War were using Charlottesville-produced parachutes.”

The other Charlottesville company that Herman discovered during his research was Southern Welding, which “made various kinds of iron piping and steel tubing. During the war, they shifted to making the steel tubing for aircraft, to contain all the electric lines and so on in B-24s and B-25s. What they also did, and their real breakthrough, is they developed the parts for arrester gear on navy aircraft carriers.”

The arrester gear allowed planes to land on the carriers without being pulled apart by a braking mechanism.

“Southern Welding, here in Charlottesville, developed the parts and manufactured the parts that went on aircraft carriers all across the Pacific. In fact, at one point, Charlottesville-made arrester gear and tailhook gear was on 43 separate aircraft carriers during the Second World War.”

Freedom's Forge is a great read. Far from a dry recitation of economic facts, the book offers compelling character profiles of otherwise unknown leaders. It shows how personality conflicts can affect the course of history and demonstrates that free enterprise can be beneficial even when -- or especially when -- the country is at war, and that efforts to direct the economy from Washington are usually (if not always) counterproductive.